| Why the Grasberg Mine Is Crucial for Freeport-McMoRan’s 2016 Plans | |
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Freeport-McMoRan Stock Whipsawed after 4Q15 Earnings Release (Continued from Prior Part) Grasberg mine
Previously, we’ve seen that Freeport-McMoRan (FCX) expects its copper unit cash costs to fall steeply in 2016. Freeport-McMoRan owns the Grasberg mine in Indonesia (EIDO), and Rio Tinto (RIO) is Freeport’s partner in this mine.
Rio Tinto also owns the Oyo Tolgoi mine in Mongolia through its subsidiary Turquoise Hill Resources (TRQ). In this part of the series, we’ll explore why the Grasberg mine is so critical for Freeport’s 2016 operating plans.
2016 unit cash costs
The graph above shows Freeport’s 2016 unit cash costs guidance. In 2016, Freeport expects its copper unit cash costs to fall across all its mines expect for those in Africa. The company expects its unit cash costs to average $1.49 per pound in North America and $1.50 per pound in South America (ILF) this year. On a consolidated basis, Freeport expects copper unit cash costs to fall to $1.10 per pound in 2016 from $1.53 per pound last year.
However, most of the expected reduction in unit cash costs seem to be coming from the Grasberg mine, where Freeport expects unit cash costs after by-product credits to average only $0.17 per pound—down from $1.09 per pound in 2015. This 84% reduction in unit cash costs at the Grasberg mine is expected to help Freeport reduce its consolidated unit cash costs.
More gold
Freeport-McMoRan expects to produce more gold in 2016 from the Grasberg mine as it completes the open pit operations. This will lead to higher by-product credits and hence drive down the unit production costs. The Grasberg mine will need to be converted into an underground mine in the next two years.
However, Freeport must sign an agreement with the Indonesian government to extend its mining contract. In the next part of this series, we’ll discuss what the company’s management had to say about the progress in their talks with the Indonesian government.
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Freeport McMoRan Copper and Gold Inc.
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PRODUCTEUR |
CODE : FCX |
ISIN : US35671D8570 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Freeport McMoran est une société de production minière d'or et de cuivre basée aux Etats-Unis D'Amerique. Freeport McMoran est productrice d'or, de cuivre, d'argent, de cobalt et de molybdène au Chili, au Perou, en Indonesie et en Republique Democratique Du Congo, en développement de projets de cuivre au Perou, et détient divers projets d'exploration au Chili. Ses principaux projets en production sont CANDELARIA, EL ABRA, CHINO - MILL, HENDERSON, MIAMI - ROM LEACH, MORENCI - MILL, OJOS DEL SALADO, MORENCI et MORENCI - ROM LEACH au Chili, GRASBERG, SIERRITA et BAGDAD en Indonesie, TENKE FUNGURUME et TYRONE en Republique Democratique Du Congo et CERRO VERDE au Perou, son principal projet en développement est SAFFORD au Perou et ses principaux projets en exploration sont BAGDAD - ROM LEACH et CHINO - ROM LEACH au Perou et CERRO VERDE - MILL, CERRO VERDE - CRUSHED LEACH, CERRO VERDE - ROM LEACH, EL ABRA - ROM LEACH et CLIMAX au Chili. Freeport McMoran est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 71,5 milliards US$ (66,8 milliards €). La valeur de son action a atteint son plus bas niveau récent le 06 mars 2020 à 10,00 US$, et son plus haut niveau récent le 25 avril 2024 à 49,40 US$. Freeport McMoran possède 1 448 000 000 actions en circulation. |